Vici Properties, which is in the real estate and hotel & casinos business, has reiterated its full-year outlook after “another transformative quarter highlighted by the acquisition of MGM Growth Properties – a business segment of the betting and casino giant MGM Resorts.

The business concluded a significant deal in Q2 and anticipated more in the coming months.

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Pursuing Further Transactions to Market Growth 

During the quarter, the real estate investment trust acquired MGM Growth Properties for a total of about $17.2 billion, including the assumption of approximately $5.7 billion in net debt. 

Concurrently with the transaction, the business entered into a triple-net master lease with MGM for an initial period of 25 years, with three 10-year tenant renewal options and an initial total yearly rent of $860m. 

In addition, the corporation kept MGP’s 50,1% ownership part in the joint venture between MGP and Blackstone, which controls MGM Grand Las Vegas and Mandalay Bay’s real estate holdings.

The annual rent under the MGM master lease will be lowered by $90 million following the closure of the sale of the Mirage Hotel & Casino operations to Hard Rock International, and by $40 million upon the divestiture of the Gold Strike Casino Resort to the Cherokee Nation Businesses. 

The former will sign into a new lease with Hard Rock for an initial base rent of $90 million, and the agreement is slated to finalize in the fourth quarter of 2022, pending normal closing conditions and regulatory clearances.

 In addition, CNB, whose lease with Vici will mirror the aforementioned selling price, is still subject to usual closing conditions and regulatory clearances before its completion in the first half of 2023.

The REIT stated that its revenue for the year’s second quarter grew 76 percent to $662,6 million from $376,4 million a year earlier. Net loss attributable to common shareholders decreased to $57.7m from $300.7m, with adjusted funds from operations reported at $430.10m, a 67.9% year-over-year increase from $256.1m.

Press Release Statement 

Edward Pitoniak, CEO of Vici Properties, said, that the second quarter of 2022 marks another revolutionary period for Vici. The business got investment grade ratings from S&P and Fitch in April, allowing it to issue the biggest investment grade bond in REIT history. 

The strategic purchase of MGM Growth Properties was completed at the end of April, giving Vici one of the most enticing portfolios of class A real estate among American REITs. They were included to the S&P 500 index in June, becoming the REIT with the quickest path from IPO to S&P 500 inclusion. 

The greater access to cash allows them to pursue deals opportunistically as the company continues its development trajectory. The business also confirmed its outlook for the full year, with AFFO estimated to decrease between $1.66 billion and $1.69 billion for the 12 months ending December 31, 2022.

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